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Why AMD is Wrong About NVIDIA

June 25, 2014 | About:
FinanceGuru

FinanceGuru

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In a recent article at Forbes, an AMD (AMD) executive essentially called foul on GameWorks -- NVIDIA's (NVDA) complete suite of graphics, physics, and ray tracing libraries and code samples designed to help developers get the most out of NVIDIA graphics hardware. GameWorks not only helps developers make their games look and perform better, but it also serves as a competitive edge for NVIDIA.

And it's completely fair.

Graphics isn't all about hardware
In the discrete graphics space, only NVIDIA and AMD remain as serious players. Both companies release products at aboutthe same cadence, and both build their graphics products on similar manufacturing processes with similar transistor budgets. From a hardware perspective, there's room for innovation and differentiation at the architectural level, but both companies, at least for high-end gamers, are quite good at developing graphics hardware.

To truly differentiate with graphics solutions, it's not enough to build the fastest or most efficient underlying hardware, since graphics performance and quality are tied to both the quality of the drivers -- that is, the software that acts as a bridge between the game code and the underlying hardware, as programmers don't usually talk directly to the hardware -- and the optimization of the game code for graphics hardware.

This is where NVIDIA's focus is an advantage
AMD's R&D budget is actually smaller than NVIDIA's. However, while NVIDIA focuses its R&D on Tegra, Tesla, GeForce, and Quadro -- the latter three all using the same or similar silicon -- AMD spreads out its R&D across a number of projects, including:

  • Two lines of X86 CPU cores (the small "Cat" cores and the larger cores such as Bulldozer, Piledriver, and Steamroller).
  • An ARM Holdings-based custom CPU core.
  • Various system-on-a-chip products for PCs and servers, and embedded.
  • Discrete graphics products for PCs, workstations, and high-performance computing.

Since NVIDIA has a higher R&D budget to focus on a narrower set of products, it's only natural that it has the capability of investing heavily in providing useful tools and support to developers to provide key competitive advantages in a space where both players provide competitive underlying hardware. This isn't unfair -- it's just how competition works.

Conclusion

AMD has chosen a strategy where it wants to participate in just about every market it can think of. There is merit to such a strategy, but it does mean that in any given market, AMD is unlikely to be the leader, as we've seen with PCs, servers, and graphics. NVIDIA, on the other hand, has chosen a strategy where it doesn't try to take on the world if it's clear that it doesn't have a competitive edge -- a lesson NVIDIA learned from its Tegra 4i launch.

Both can succeed, but right now NVIDIA is in far better financial shape than AMD is, with a ton of cash on the balance sheet, high gross margins, and much more robust profitability. That said, it'll be interesting to see how well AMD's strategy plays out over time. But the fact remains that what NVIDIA is doing with its GameWorks and developer relations is not only completely fair, but it is also exactly how competitive markets are supposed to work.


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Comments

costa.b77
Costa.b77 - 4 months ago

Why AMD (although they are not exactly saints themselves) is absolutely right about NVIDIA:

What nvidia is trying to do is get the software developers to use proprietary code, which is not accesible by competitors AMD and INTEL, that is meant to work with DX11 API. So far so good.

Where they are wrong and AMD is absolutely right, is that they managed to put the competition in a situation where they are forced to compete for DX11 superiority but with the open access nature of DX11 API practically taken out of the equation. This turns what should have been a competition about GPU hardware and drivers into competition about developer influence.

NVIDIA stated very clearly that although they may provide a source code license to developers that pay for it, that licence is for them only. This practically means that they cannot work together with AMD for optimisations because they are not allowed to share NVIDIA intellectual property. And, importantly, all this happens under the blanket of DX11 which is meant to be (and is perceived as being) GPU-vendor agnostic.

That access to source code allows for far more efficient optimisation has been confirmed by all the software developers that have been asked. In fact, not even NVIDIA denied this. What they said was that it is not absolutely necessary to have access to the source code in order to do optimisations, which is true. What they didn't say was that having access to source code allows for orders of magnitude better optimisations than not having access.

It would have been fair if NVIDIA let the developers write and optimise the games the way they usually do but paid them to put a GW add-on that would turn on some eye candy for users that have NVIDIA hardware. Which is more or less how PhysX works, you can turn it on and off at will.

Instead, they pay them to incorporate GW deep into their game engine and in practice turning a DX11 into "NV-Mantle" that just happens to be compatible with other hardware.

Although, it may not seem that there is anything foundamentaly wrong with any of the individual actions that NVIDIA took, looking at the end result those actions produced it most certainly looks like unfair competition.

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